Did Louisiana Make a Deal With the Devil Over Oil

2 years ago

Do energy companies have a responsibility to mitigate the damage caused by their drilling for oil and gas in Louisiana? That’s the issue now being litigated in the controversial levee board lawsuits now in the courts.

Louisiana was seduced by an outside industry full of vast economic promises. The money came in easily and there can be no dispute that many new jobs were created. But when you put the financial tally to paper, has it been worth it?

A number of Louisiana politicians, including Governor Huey Long in the 1930s, and Plaquemines Parish dictator Leander Perez in the 1950s, made off like bandits by creating family controlled corporations and awarding themselves public oil leases that made them hundreds of millions of dollars. Oil company cash has flowed into state and local political campaigns for decades.

Perez was particularly aloof from the public interest when he used his political clout to blackmail then Governor Earl Long back in the late 1940s to reject a federal-state split of off shore oil. President Truman forged a compromise on the federal-state land dispute by offering Louisiana two thirds of all off shore oil out to a three mile boundary, then one third of all production from that point on out into the Gulf. Perez opposed the deal as his “vested interest” made him greedy, and Louisiana ended up receiving not one penny after a protracted battle all the way up to the U.S. Supreme Court. The failure to take this settlement has cost Louisiana, by several studies, more than $500 billion (that’s billon with a “B”) in lost revenue.

Back in the early 70s when I was first elected to the Louisiana senate, 40 percent of the state’s budget came from oil and gas royalties. This year, some one-billon dollars is budgeted from oil and gas income, but the state budget has grown to $28.5 billion. So the mineral income is a diminishing return. But still, there’s been a continuing flow of oil money filling the Louisiana state treasury. But what about the environmental damage left behind? Numerous oil pits and petroleum waste dumps crisscross the state, with a maze of corporations making it often impossible to determine who caused the damage. The hundreds of miles of pipeline cutting through the south Louisiana marsh cause a football field loss of Louisiana land into the Gulf every day. The continuing coastal erosion caused by oil production has dramatically weakened the wetlands hurricane protection system.

History shows that Louisiana and a number of southern states were in the economic doldrums before the advent of oil. Other Gulf States with no minerals had to create new jobs with the limited resources at hand. Taking the approach that their future economic development was in the heads of their students, these states have jumped ahead of Louisiana in a number of economic and environmental measurements. That’s why universities in surrounding states like Alabama, Georgia, Florida, and the Carolinas are ranked considerably ahead of Louisiana’s academic institutions. They had to use their brain power. But in Louisiana, it was oil.

Remember the 1950s movie Thunder Bay? Jimmy Stewart plays an oil wildcatter who discovers oil in the Gulf. When the locals rise up in arms, Stewart makes no bones about what they face. “There’s oil under this Gulf. We need it. Everybody needs it. Without oil, this country of ours would stop and start to die. And you would die. You die,” he tells the crowd. “You can’t stop progress. Nobody can.”

Stewart might have been right, but history tells us, time and time again, that with resources and power, there is responsibility. Did Louisiana accept the riches of the land, but fail to demand that those who set the rules, those who govern, be good stewards of these bountiful resources? Or did the state just stand by, pocket the money, and demand little in protection and environmental accountability?

It may not be completely fair to call it a deal with the devil. But you have to take the bad with the good. The bucks have been rolling in for years. And now it’s payback time. So as the blame game and finger pointing continue, there is plenty of fault to go around. And that’s what this lawsuit against the oil companies is really all about.

Jim Brown's Sunday radio program is syndicated all over the country and all over the universe on the worldwide web. But here's the good news. Jim broadcasts on his flagship station right here at home on WJBO. So it's just natural that he will talk about the LSU Tigers, south Louisiana food, Mardi Gras, The Saints, and all the many other events that makes the Baton Rouge area such a special place to live. If you can't hear the show live, you can listen to a podcast over Jim's website. So be sure to tune in and hear a little "Common Sense."